EghtesadOnline: Switzerland is holding talks with the United States and Iran about launching a humanitarian payment channel to help ensure food and drugs keep flowing to the Islamic Republic amid tightened US sanctions, the Swiss government said.

“Switzerland is committed to safeguarding Swiss economic interests and closely follows the development of the situation. The authorities are in direct contact with the competent authorities of the United States, the EU and Iran,” the State Secretariat for Economic Affairs (SECO) said in an emailed statement on Monday as reported by Reuters.

The first round of renewed US sanctions reimposed on August 7 prohibits Iran's purchase of US dollars and precious metals, part of a larger move that attempts to cut the country off from the international financial system. A second tranche of US sanctions on Iran's oil and gas sector took effect on Monday.

“Particularly in the humanitarian field, the federal government is committed to ensuring that food and pharmaceutical products can continue to be supplied from Switzerland,” SECO said, adding it was in touch with US authorities, Iran and unnamed Swiss companies on developing a humanitarian payment channel, Financial Tribune reported.

Switzerland, which represents US diplomatic interests in Iran, was not involved in separate European Union discussions on setting up a special purpose vehicle to continue trade with Iran, but was following the talks closely, SECO said.

The Swiss were not involved in developing alternative mechanisms to SWIFT in the area of secure messaging and payment transactions.

A new European Union mechanism to facilitate payments for Iranian exports should be legally in place by Nov. 4, but EU diplomats say it will not be operational until early next year.

Federica Mogherini, the European bloc’s foreign policy chief, announced the plan at the United Nations General Assembly in New York in September. The mechanism, known as Special Purpose Vehicle, is designed to circumvent the sanctions, under which Washington can cut off any bank that enables oil transactions with Iran.

SPV, which could incorporate a barter system, aims to sidestep the US financial system by using an EU intermediary to handle trade with Iran. It could ensure, for example, that Iranian oil bought by Europeans could be paid for with EU goods and services of the same value.

Switzerland in August encouraged Swiss companies to pursue business ties with Iran prudently and expressed regret at the poor sanctions situation.

Swiss-based Nestle, the world’s biggest food company that produces infant formula and cereals as well as bottled water in Iran, said in August it saw no direct fallout from renewed US sanctions on the country.

But Swiss lender Banque de Commerce et de Placements (BCP) in May suspended new transactions with Iran and started winding down Iran-related business.

Founded in 1963, BCP had been among players active in Iran-related trade finance in commodities, finance sources say.

Overall, Swiss exports to Iran rose 7.6% in 2017 to 536 million Swiss francs ($534 million) while imports rose 300% to 85 million francs. In the first nine months of this year, exports fell to 311.2 million while imports hit 17.2 million, provisional trade data show.

The European Union is opposed to the US decision to reimpose oil and financial sanctions against Iran, European Economic Affairs Commissioner Pierre Moscovici said on Monday.

“The European Union does not approve of it,” Moscovici told Franceinfo radio, hours after further US sanctions on Iran came into force.

The European Union, France, Germany and Britain said in a joint statement on Friday that they regret Washington’s decision to reimpose sanctions on Iran.

"We deeply regret the further reimposition of sanctions by the United States, due to the latter’s withdrawal from the Joint Comprehensive Plan of Action," reads the statement.

"It is our aim to protect European economic operators engaged in legitimate business with Iran, in accordance with EU law and with UN Security Council Resolution 2231,” Mogherini, respective foreign ministers of France, Germany and the UK, Jean-Yves Le Drian, Heiko Maas and Jeremy Hunt, and respective finance ministers of France, Germany and the UK, Bruno Le Maire, Olaf Scholz and Philip Hammond said in the joint statement.